|Announcement of debt relief for Africa came after President Bush and British Prime Minister Tony Blair met at White House |
The world’s wealthiest nations recently agreed to write off $40 billion of debt owed by 18 heavily indebted countries to the World Bank, the International Monetary Fund and the African Development Bank. The agreement, spearheaded by British Prime Minister Tony Blair ahead of next month’s G-8 Summit of leading industrial nations, had long been sought by impoverished nations, particularly in Africa. Despite the landmark debt cancellation accord, substantial differences remain between Britain and the United States over increased aid to the continent.
Speaking on VOA News Now’s Press Conference USA just days after President Bush met with Prime Minister Blair at the White House, Lael Brainard, director of the Poverty and Global Economy Initiative at The Brookings Institution in Washington, described Washington and London as being “miles apart” on expanded aid commitments to Africa. Whereas British Prime Minister Blair has adopted the internationally agreed growth target of 0.7 % of GDP by 2015, Ms. Brainard said, the Bush administration has declined to make any kind of numerical commitment.
On increasing aid to the continent, Prime Minister Blair has proposed doubling aid to Africa to $25 billion each year and raising it to $50 billion a year starting in 2015. Lael Brainard warned that Mr. Blair is likely to get only part of what he has asked for in time for the G-8 Summit in Gleneagles, Scotland, from July 6 to July 8. Prime Minister Blair, who will host the summit, has placed poverty reduction at the top of his agenda. Ms. Brainard said the debt relief piece appears to be the most secure. But she thinks that Britain’s recommendations for a massive increase in foreign assistance and a major change in the way rich countries trade with African countries are unlikely to be adopted by the time of the summit.
According to Lael Brainard, there are some risks associated with big increases in foreign aid, such as corruption and inflation. But she noted that, in the areas of environment and energy, agriculture and rural development, and health and education, African countries could easily absorb a massive increase in funding.
In an address to the people of Africa, broadcast exclusively on VOA last week, President Bush touted the success of increased trade and investment between the United States and Africa made possible by the Africa Growth and Opportunity Act. Although the legislation has indeed made a big difference to Africans, Lael Brainard said it does not address the critical issue of agricultural subsidies, and African nations are unable to compete with U.S. and especially European Union farm subsidies.
At the upcoming G-8 Summit, Ms. Brainard said she thinks the big achievement will be in the area of debt relief, but there is likely to be “disappointment” regarding massive increases in aid and especially over the mechanism for financing increased aid flows.
For full audio of the program Press Conference USA click here.